Mortgage interest relief query

T

Tangerine

Registered User
Messages
46
Hi,
I normally receive €166 per month mortgage interest relief and this has been reduced to €133 and am querying the rationale for this ammendment.
Morgtage Details:
First Time Buyer as at Dec 2006
Bank of Ireland: Intersest rate: 4.25% fixed for three years.
2007 : monthly instalment - €896.54. monthy interest relief €166.
2008: monthly instalment- €949.28 . monthly interest relief: €133
I would have presumed that the interest relief on the mortgage would have remained the same.
Many thanks for any assistance with this query
Tangerine
 
Last edited:
Your repayments seem to have changed - apart from your relief. If it is a fixed rate how come the payments have gone up? Has anything else altered? Have you contacted the lender?
 
Hi,
Those were the terms of the mortgage: €195,000 over 25 years. I presume because the interest rate is fixed for three years they have incorportated increments over the three years:
From year 4 it is fixed at €1,007 per month variable interest. Thats fine as I agreed to those terms and carried out a fair bit of research when taking out mortgage. Just suprised by the decrease in mortgage interest relief.
Tangerine
 
Are you saying that it was €195K over 25 years fixed for the first three years at 4.25% and fixed at some other rate (what is this?) from year 4 which starts in 2008?
 
I think that the reason your TRS has dropped is that you won't be paying as much interest in 2008. TRS is calculated at 20% on the amount of interest you pay, up to a maximum ceiling. You're not up to the ceiling. As you progress through a repayment mortgage, the amount of capital you pay each month increases and the amount of interest you pay consequently decreases, with a corresponding effect on your TRS.

On the increase in monthly repayments, it is possible that your monthly repayment itself is index-linked in some way, although this is quite rare. Are you sure you asked for your repayments to increase annually? The bank won't do this unless you specifically requested it, regardless of whether you're on a fixed or variable rate.
 
ClubMan said:
Are you saying that it was €195K over 25 years fixed for the first three years at 4.25% and fixed at some other rate (what is this?) from year 4 which starts in 2008?
Click to expand...

All fixed rate loan offers must quote the repayments at the fixed rate and also the repayments at the "follow-on" rate. I'm guessing that Tangerine is quoting from the loan offer. Typically, the rate quoted for the "follow-on" rate is the Bank of Ireland standard variable rate at the date of the loan offer. The actual repayment Tangerine will pay will be the rate applicable at the end of the fixed rate.
 
Yes it is €195K fixed for the first three years at 4.25% and variable from year four onward.
"264 repayment instalments of €1,077.64 variable at 4.24% as from the beginning of year 4". (mortgage offer letter).
 
Thank You LD for clarifying lower TRS payment. Yes have checked it and the amount of interest paid has dropped by €122.52.

With regard to the increase in monthly repayments; it suited me to start with lower payments initially and progress incrementally over the first three years as that is when outgoings are greatest.

Tangerine
 
Tangerine said:
Yes it is €195K fixed for the first three years at 4.25% and variable from year four onward.
"264 repayment instalments of €1,077.64 variable at 4.24% as from the beginning of year 4". (mortgage offer letter).
Click to expand...

Unfortunately you'll find that the 4.24% variable rate is a distant memory by now - Bank of Ireland's standard variable rate is now >5.3%.
 
€195k x 4.25% = €8k p.a. interest
€8k * 20% (Tax Relief) = €1600p.a. or €133pm

I think it's likely that you received no Mortgage Interest relief for the first couple of months of 2007 while your application was being processed and the monthly amount received over the remainder of the year was increased to allow for this.
 
I'm in a similar position my trs has just dropped from 177 euro per month to 66 euro! Can't believe it!
I drew down on a 35 year 315,000 mortgage in Dec 06 (AIB). Discounted tracker for first 12 months (o.6 above ECB reate), then variable which is due to kick in in March this year. I went interest only for first year so would that impact upon it at all? I also had a three month moritorium from Jan to Mar last year and then began my repayments. My repayments up until Dec have been around 1200. They will be 1350 from now until March and I have know idea how much they'll be when March kicks in and I'm no longer interest only! Currently on a 5.1% interest rate

Would appreciate your help and advice. I'm clueless as you can see..
Thanks
 
You should qualify for the max relief with that mortgage.
€177pm for 9 months of 2007 sounds correct (a total of €1600 for the year, 20% of €8k).
Your payment should now be €166pm for 2008 (a total of €2000 for the year, 20% of €10k)
 
Just a note to say thank you to all for your assistance with clarifying the lower TRS payment and to Der Kaiser for the added detail which makes sense.
Tangerine
 
Dont want to overtake the thread but I have a similar problem.

Herself and I got a joint mortgage for €290,000 last August over 30 years (1st mortgage) and paying back around €1,500 a month.

Applied for mortgage relief and got it back in Dec around €900.

This month i notice my mortgage relief is down is €82.

Can this be correct?
 
According to Karl Jeacle's mortgage calculator your annual repayment details are likely to be similar to the following (assuming a rate of 5% applicable for the full term which obviously will not be the case):
Code: 
2007      €6,027.08         €1,756.82         €288,243.18
2008      €14,312.96        €4,368.40         €283,874.78
2009      €14,089.45        €4,591.91         €279,282.87
2010      €13,854.53        €4,826.83         €274,456.04
2011      €13,607.59        €5,073.77         €269,382.27
2012      €13,347.98        €5,333.38         €264,048.89
2013      €13,075.12        €5,606.24         €258,442.65
2014      €12,788.29        €5,893.07         €252,549.58
2015      €12,486.81        €6,194.55         €246,355.03
2016      €12,169.87        €6,511.49         €239,843.54
2017      €11,836.74        €6,844.62         €232,998.92
2018      €11,486.56        €7,194.80         €225,804.12
2019      €11,118.44        €7,562.92         €218,241.20
2020      €10,731.52        €7,949.84         €210,291.36
2021      €10,324.77        €8,356.59         €201,934.77
2022      €9,897.25         €8,784.11         €193,150.66
2023      €9,447.84         €9,233.52         €183,917.14
2024      €8,975.44         €9,705.92         €174,211.22
2025      €8,478.85         €10,202.51        €164,008.71
2026      €7,956.89         €10,724.47        €153,284.24
2027      €7,408.21         €11,273.15        €142,011.09
2028      €6,831.43         €11,849.93        €130,161.16
2029      €6,225.18         €12,456.18        €117,704.98
2030      €5,587.88         €13,093.48        €104,611.50
2031      €4,918.00         €13,763.36        €90,848.14
2032      €4,213.83         €14,467.53        €76,380.61
2033      €3,473.66         €15,207.70        €61,172.91
2034      €2,695.61         €15,985.75        €45,187.16
2035      €1,877.74         €16,803.62        €28,383.54
2036      €1,018.03         €17,663.33        €10,720.21
2037      €179.45           €10,718.01        €2.20
If you both qualify for the "FTB first 7 years of mortgage" preferential relief then you should qualify for relief on a maximum of €20K interest. Since you will actually only pay c. €14K in 2008 you will get relief on that amount. This should be c. €14K @ 20% = €2,800 p.a. or €233.33 p.m. For 2007 you paid €6K interest so should have received relief of €6K @ 20% = €1,200 as far as I know. Sounds like something may be wrong. Perhaps Revenue don't have the correct details for you? You should get onto them to check.
 
Gmac said:
Cheers clubman.

Will give them a call tomorrow
Click to expand...
Good luck! Ive been trying all day on 1890 463626 and the message says they have no available operators to take the call...im in the same boat..id say theyre inundated with calls. If theres another number let me know thanks!
 
If that was the case then I would email them (not sure if you can send secure emails using the PAYE Self Service online system?) or write to them instead of hanging on the phone.
 
You must log in or register to reply here.
Back
Top